http://www.irishtimes.com/newspaper/breaking/2012/0123/breaking8.html
This issue is something that has been going on for years. The United States is afraid of Iran getting a nuclear weapon so it has worked to use economic sanctions, often in conjunction with other nations of the EU and UN, to get the later to abandon its current nuclear program, which Iran defends as a project to create more energy for Iran. Given the semi-hostile relationship between the two nations (Iran has recently threatened to cut off the Strait of Hormuz, a bend that leads to the Persian Gulf) the more support for sanctions the better because it would help to try and get the intended result, especially with some EU members accounting of a large share of Iran's exports. The results of support for the sanctions (US and EU) and opposition to them (Russia and China prominently), to me hints at a continuing economic divide among the world between markets and more command-style economic models.
3 comments:
I think that the potential cut off from Iranian oil would cause a serious crisis for all of the developed nations depending on it. However, it also shows the importance of continuing to go forward with green technology, especially vehicles. If the world was less dependent on Iran and the other oil rich countries, we would have less incentive to agree to their terms when it came to other sorts of treaties, which could be beneficial in the long run.
Iran has around 10% of the world's oil preserves, which, while significant, is by no means the only source of oil for the western countries opting to follow the sanctions. It will be interesting to see whether European countries or Iran suffer more from the embargo, economically speaking. With one of the largest markets in the world of China willing to purchase Iranian oil, it seems likely that they will still be able to profit immensely from the oil trade. However, Europe is Iran's second largest oil customer, and losing their business seems fairly substantial. I will be interested to see how long the embargo lasts.
I would agree that Iran losing its second largest customer would make a significant dent in their income from oil exports. I'm concerned that the embargo and future sanctions may hurt the Iranian people more than the Iranian government. If the Iranian population is unable to receive needed aid or resources from the Western world it is likely we will see an increase in inequality for the country as a whole.
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